Who are the winners and losers as health reform goes national?

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HAD ANY OF THE SEVERAL hundred VIPs funneling into Faneuil Hall assumed they were headed to a run-of-the-mill legislative bill signing, the two banners greeting them inside would have instantly disabused them of the notion: “MAKING HISTORY IN HEALTH CARE” they read in foot-high letters. And on this day, the boast just happened to be true. It was April 12, 2006, and Governor Mitt Romney was going to sign the nation’s first universal health care program — known as Romneycare — into law.

Romney, already eyeing the presidency, didn’t underplay the drama. Programs for the signing were printed on faux parchment and handed out to guests along with commemorative lapel pins. The procession of lawmakers, including Romney, US Senator Ted Kennedy, and more than a dozen others, was led to the stage by a fife and drum corps dressed in full Colonial regalia. “Obviously, I’d like to express appreciation for Cecil B. Demille for organizing this event this morning,” Romney quipped after taking the podium to a long wave of applause.

He continued: “This bill can lead to every citizen with affordable comprehensive health insurance; small businesses able to conveniently buy insurance for their employees at a cost that’s competitive with big businesses; medical transparency, bringing marketplace dynamics to health care, really for the first time; and finally, beginning to rein in health care inflation.”

When it was Kennedy’s turn to speak, his comments underscored, perhaps encouraged, the idea that similar sweeping reforms could be carried out nationwide. “This is a moment to savor, of hope and promise and achievement for all the people of our Commonwealth, and perhaps for the rest of America, too,” he said. “And we intend to make the most of it.”

Seven years later, we’re about to find out whether the Commonwealth’s achievements will extend to the rest of the United States. The Romneycare-inspired Patient Protection and Affordable Care Act, otherwise known as Obamacare, and the insurance exchanges it created went online as expected on October 1, despite a simultaneous federal government shutdown. On January 1, the insurance plans millions of Americans are expected to buy in those marketplaces this year — and an estimated 24 million Americans will purchase by 2017 — will go into effect.

Not even Massachusetts health reform’s staunchest supporters would argue the system is perfect. We had the highest health care costs before reform, and we still do. That’s no small thing. But the law is fulfilling its primary mission of expanding access. At the time of Romney’s signing, about 92 percent of the state’s residents had health insurance. Now 97 percent do, a higher percentage than in any other state.

With that increase has come improved overall health: Cancer screenings, preventive care visits, diabetes treatments, and the percentage of people going to the dentist have all gone up. Smoking, state spending on unpaid emergency room bills, people putting off needed care because they couldn’t afford it, and racial disparities in coverage have all gone down.

Things aren’t perfect, but they’re generally working. So far, Romneycare has brought health insurance to 439,000 previously uninsured people in Massachusetts. The big question now is whether Obama-care can do something similar for the more than 47 million uninsured Americans everywhere else.

Part of the answer to that question lies in just how closely the Obamacare model is able to hew to the elements it shares with its predecessor. Reform in Massachusetts worked because of three main initiatives: the individual mandate, which requires people to buy insurance or risk fines; the subsidies that help low- and middle-income people pay for their plans; and the expansion of Medicaid coverage for the state’s poorest citizens. Reform wouldn’t have been as effective without all three parts working together, experts say.

“Health care reform is like a puzzle,” says Jean Yang, executive director of the Massachusetts Health Connector, the state’s insurance exchange. “You need to put a few pieces together and the thing will work.”

But then there’s what happens when an essential piece of the puzzle is missing.

Chip Somodevilla/Getty Images

President Obama signs the Patient Protection and Affordable Care Act, better known as Obamacare, into law on March 23, 2010.

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ON JUNE 28, 2012, after the Supreme Court issued its hotly anticipated decision on whether the Affordable Care Act (ACA) was constitutional, proponents of the law were quick to seize on the good news. By a 5-to-4 vote, the court upheld the controversial individual mandate, ruling that the federal government could indeed levy fines if people and organizations didn’t buy insurance.

In a story promptly posted online, The New York Times declared the decision a “Victory for Obama.” “Whatever the politics,” the president himself said, “today’s decision was a victory for people all over this country whose lives will be more secure because of this law.”

But the Supreme Court decision brought bad news, too. The ACA as originally written would have required states to loosen their eligibility rules for Medicaid, the insurance program that mainly helps pregnant women and children of poor families, opening it to millions more people, including the childless working poor. On that mandate, however, the justices ruled 7 to 2 that the federal government would be overstepping its authority. Whether to expand Medicaid would be a decision left to individual states.

Just how bad this news was would take time to become apparent. “I think the implications of that [decision] were not as clear at the time,” says Jon Kingsdale, the founding executive director of the Massachusetts Health Connector, who is now a managing director in the Boston office of Wakely Consulting Group. “It wasn’t clear how many states would not expand it.”

Since the ruling, that picture has gradually come into focus. As of September 30, according to the Centers for Medicare & Medicaid Services, 24 states plus the District of Columbia have decided to expand Medicaid. But 26 states have decided against it or are leaning toward such a decision. The Washington-based research group Urban Institute has estimated that 15.1 million uninsured Americans would get coverage if every state expanded — but some 7 million of those people are out of luck because they live in states that aren’t expanding.

“There will be very different experiences in states expanding Medicaid versus not choosing to,” says John Auerbach, director of the Institute on Urban Health Research at Northeastern University who was state public health commissioner between 2007 and 2012. “There will be a bifurcation in the nation. Those with a true combination of shared responsibility and increased access will have an experience like in Massachusetts, and those that don’t will be quite different.”

A big part of reform’s success in Massachusetts stems from people joining MassHealth (which encompasses the Medicaid program here). Of the roughly 400,000 residents who gained coverage in the early years of reform, about 61,000 came in from expanded MassHealth eligibility. Another 190,000 were people who qualified under the old rules, but perhaps lost a job during the recession or learned they qualified through a huge public information campaign. That’s called the welcome mat or the woodwork effect, says Brian Rosman, research director of the advocacy group Health Care for All. “People come out of the woodwork who were always eligible and start enrolling because of all of the attention paid to coverage for other uninsured groups.”

The effects of getting so many uninsured into the medical system were clear right away. In the first year of reform, Massachusetts saw an 8 percent rise in age-appropriate people undergoing colonoscopies and a similar procedure. “People without insurance don’t usually get colonoscopies,” Auerbach says. “You weren’t going to say, ‘I’m going to pay out of pocket to get something that might say I’m at risk.’ ” Under the new plan, the percentage of Massachusetts residents putting off going to the doctor because they couldn’t afford it was half the national average.

More people started getting other screenings and preventive care, including better and earlier treatment for diabetes; controlling disease earlier promises to save money and lives. The same goes for cancer. More than 33,000 Massachusetts adults on MassHealth have quit smoking, thanks to coverage for cessation treatments and counseling.

“In this country,” says Jean Yang, “the smokers are heavily concentrated in the low-income population, which tends to be the last batch of the population that comes into insurance.” By expanding Medicaid, you start caring for people who have been, historically, the most problematic to insure — low-income families; those with chronic conditions; residents plagued by mental health issues; children missing basic pediatric care. They are the groups of people who are not generally easy to reach, Yang says. “You’re really getting to the population that’s the most challenging to care for.”

That costs money, of course, and lots of states have decided against expanding Medicaid because of the added expense. Yet the federal government has pledged to pay 100 percent of the new bills for three years, and no less than 90 percent after that. In addition, the Congressional Budget Office has estimated that states would each spend only 2.8 percent more between 2014 and 2022, on average, expanding access.

The increase in spending the budget office reported doesn’t even factor in two big things. First, that lots of new federal money is tied to expansion; those 26 states opting out are on track to forgo approximately $50 billion in federal payments in 2016 alone, according to the Kaiser Family Foundation. Second, that budget office figure doesn’t incorporate the savings that potentially follow from a more-insured population. That’s another lesson from Massachusetts: Expanding coverage can reduce uncompensated costs elsewhere in the system, especially care in emergency rooms that isn’t paid by patients.

In the first full year of reform, a Massachusetts program provided $252 million to hospitals and health centers that helped uninsured or underinsured people. A quarter of a billion dollars is a lot of money, sure, but it was 38 percent less than the state spent covering uncompensated treatments with a preceding program the year before.

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IN NEW ENGLAND, which tends to have a higher percentage of insurance coverage than other parts of the country, four of six states have already decided to expand. Together, Massachusetts, Connecticut, Rhode Island, and Vermont could potentially extend coverage to close to 290,000 poor people, according to the left-leaning think tank Center on Budget and Policy Priorities (as of press time, a New Hampshire commission had yet to decide on a direction that could bring 58,000 poor adults into Medicaid).

Because Massachusetts is expanding, it will actually save more money. About 100,000 Medicaid-eligible people will move from one subsidized program, the cost of which the state splits evenly with the federal government, to another in which the state will pay only 25 percent . The ACA’s arrival here is expected to bring in as much as $400 million a year in federal reimbursments, according to recent estimates.

In Maine, however, Republican Governor Paul LePage vetoed the Legislature’s efforts to expand, saying it would add too many smokers and heavy drinkers to the Medicaid rolls. In New England’s poorest state, 133,000 people don’t have insurance, says Joseph Ditre, founding executive director of Augusta-based Consumers for Affordable Health Care. “Seventy thousand would have gotten insurance coverage if Maine decided to expand its Medicaid program.”

The irony is that, generally speaking, the states where citizens could most benefit from Medicaid are the very ones electing not to expand their programs. Places like Florida and Georgia have huge numbers of poor uninsured. In Texas, 1 in 4 people are not covered by insurance. The Kaiser Family Foundation estimates many states could reduce their number of uninsured by half through new Medicaid rules. But now 4.1 million people in those three states alone will likely continue uninsured.

Because the policy makers writing the ACA did not envision the Supreme Court dropping the Medicaid-expansion mandate, they didn’t plan for what would happen if it went away. The idea was that Medicaid would cover people making up to 138 percent of the federal poverty level (so about $16,000 annually for an individual). If you didn’t qualify for that, and made up to 400 percent of the poverty level, tax credits would help you buy private insurance on the exchanges. But things didn’t work out as expected on the Medicaid front.

And here’s where the news goes from bad to even worse for millions of the nation’s poorest people. In states not expanding, as a group, the existing median Medicaid qualification cutoff is around 48 percent. That means that anyone making 49 percent or more of the federal poverty level has too much money to get Medicaid coverage. Meanwhile, anyone making below 100 percent is making too little to get new subsidies created by the ACA. “A result,” a writer observed in The New York Times recently, “is the frustrating situation in which you could qualify for financial help to buy coverage on the marketplaces — if only you made more money.”

Medicaid expansion is “really one of the legacies of Romneycare,” says Rosman, the researcher. “It unfortunately isn’t being matched in roughly half the states that are choosing to ignore their lowest-income folks.”

Kingsdale and others retain hope that legislators in the states that opted against expanding will change their minds in the years ahead — the ACA allows that — but acknowledges that this is probably the landscape for 2014, and that this big gap in coverage will present a big problem. “Can you imagine when people are told ‘You’re too poor to qualify for the exchange and too rich to qualify for Medicaid,’ ” says Kingsdale.

And what do you say to people in that situation? “Good question. You say, ‘Call your congressman. Or your governor.’ ”